Fifth Avenue retailing coming to a Canadian street near you

The Canadian retail market has not exactly been a good news story this year (bye-bye Target), but nobody seems to have told the stores that play in the luxury end of it.

Saks Fifth Avenue OFF 5^th (the brand’s discount arm) has announced it will open its first three non-U.S. outlets in Ottawa, Niagara-on-the-Lake and Vaughn next year, part of a larger roll-out that will also see seven Canadian stores in the Saks flagship brand open their doors.

While technically not a foreign player after Hudson’s Bay bought the chain last year, the Saks brand’s arrival is part of a high-end foreign invasion on the traditional stomping ground of Holt Renfrew and Harry Rosen.

Of course, it’s not all giggles in the Canadian retail space, as Target dashes out of town with its tail between its legs, Sears Canada limps along, and smaller players like Bowring operate under bankruptcy protection.

But go up a few price points, and the air seems to be clearer, with both large and small players getting into the action.

“It’s unprecedented for Canada to have so many luxury retail stores opening up at the same time,” says retail consultant Ed Strapagiel.

This perhaps shouldn’t be a surprise, as the luxury real estate markets are booming in Toronto and Vancouver. Those folks sometimes take the Rolls down to Bloor St, right?

But somewhere bells are ringing about having seen this all before, with Wal-Mart steaming in and cutting the legs out of Sears and Hudson’s Bay, and Target arriving only to implode.

“Part of that is many of the luxury brands have a big herding instinct. They like to rub shoulders with each other in the same place,” says Strapagiel.

“Perhaps (they’re) oversupplying the market.”

In other words, fast-forward a few years and the U.S. names may be making a hasty retreat, while the Canadian players downsize and sell off real estate.

But for now, the party’s on, and consumers with high-end tastes and thick wallets can look forward to more choice than they’ve even had on this side of the border.

Here’s a look at growth plans at the current and soon-to-be big names in Canadian high-end retail:

Saks Fifth Avenue: Saks will arrive with a splash early next year, elbowing its way into Hudson Bay’s Toronto flagship on Queen Street, and also opening a store in the Sherway Gardens Mall. In total, seven Saks stores should be open in Canada, including in Montreal and Vancouver, to go along with the more numerous but smaller OFF 5^th outlets.

Nordstrom: The Seattle retailer is taking the slow-and-steady hare approach versus the Target rabbit ‘sprint-then-snooze’ plan. Nordstrom entered the Canadian market in September in Calgary, and just opened its second store in March in Ottawa. Current plans are to open another store in Vancouver this year and three more over the next two years, including taking over the former Sears space at Toronto’s Eaton Centre. With Saks set to open at the other end of the same mall, the Eaton Centre should have a relevance it hasn’t enjoyed since there actually were stores called Eaton’s.

Holt Renfrew: Grandma’s luxury store has seen the writing on the wall and is getting ready for the invasion. Holt has begun shutting down smaller stores in Ottawa and Quebec City to focus on the bigger centers, which will be more likely to absorb the new competition. It plans to pump up its overall store space by expanding locations in big cities and will open a new 120,000 foot location at Mississauga’s Square One Mall next year.

Harry Rosen: The place where you go to buy a suit when you finally get that promotion is protecting what it has, which is fierce brand loyalty and a good reputation, through increased staff training, while also renovating and expanding existing stores and opening a few new ones.

Bloomingdale’s: Calm down. No, it’s not happening yet. But Bloomingdale’s has long been rumoured to be exploring a Canadian move, and was reportedly sniffing around Toronto real estate just a few months ago. When that happens, we can officially say that the storm has become the Perfect Storm.